Impact of COVID-19 on the sports sector

Impact of COVID-19 on the sports sector

COVID-19 is a pandemic for the whole world. These types of viruses have made the whole world come together to survive humans themselves. It made to show unity and helping nature, humanism to the whole world that human beings are one, and get together if anything that damages the existence of humans by other creatures. Yes, modernism, scientific, technology all are there but when nature takes an act of revenge these are nothing it's a reminder for humans.

Most affected countries as of 21 April 2020 in the USA, Spain, Italy, China. India because of early measures like breaking the chain formula through a lockdown and stopping public gatherings it was able to control to a large extent.

We might just be in the first quarter of 2020, but the year has already seen the unprecedented shutdown of global sports leagues due to COVID-19. The last such shut down happened during World War II when all major sporting events across the globe including the Olympics in 1940 & 1944 were canceled.

Major sports leagues across the world including EPL, La Liga, Seria A, NBA, Champions League, bilateral cricket tournaments are suspended at least until the first week of May as governments scramble to contain the spread of the virus which has been declared a global pandemic by the World Health Organization. UEFA EURO 2020 and COPA America 2020, the two major football events scheduled to take place this year in June have also been pushed to 2021. Even the Olympics 2020 being held in Japan face the threat of cancellation or postponement if the pandemic does not subside in the next couple of months. More recently, the Indian Super League finals between ATK & FC had to be played behind closed doors. The Guinness Six Nations, London Marathon, and Formula One have also been impacted, as has golf after the Masters was postponed. With the Olympics also on the horizon, this summer has been postponed.

For Instance in India, Indian Premier League (IPL), one of the most keenly awaited events in India has also felt the heat of Coronavirus, with Board of Cricket Control of India (BCCI) deciding to postpone the start of IPL season until May 15th with no clear visibility of its start date and a major threat of cancellation looming around. The Government of India and various state governments have mandatorily banned public gatherings because of public health and safety concerns. The government has also suspended visas from most countries which might impact the availability of foreign players who are a vital cog in the IPL. Given this background, the options before BCCI are somewhat limited.

According to the Latest Report The Indian Premier League (IPL) 2020 has been suspended indefinitely due to the COVID-19 pandemic, the Board of Control for Cricket in India (BCCI) confirmed on Thursday last week. This comes on the heels of the extension of lockdown in the country.

The IPL 2020, which was scheduled to get underway on March 29, was initially suspended until May 15 after the country went on a 2.0 lockdown in a bid to limit the spread of the novel coronavirus outbreak.

Can’t say whether it will be postponed or this year’s edition will be canceled in the end, anything may happen. But there will be a huge impact in both circumstances., If there is a cancellation, the entity that would lose the most is the BCCI and other Cricket State Board, which is expected to make more than Rs 4,200 crore from broadcasting and digital rights, sponsors like Vivo, and 20 percent of the franchisee revenues. However, if the matches are held in spectator-less stadia, the revenue loss for both the franchisees and the BCCI (as revenues will go down) would be limited. They make around Rs 10 crore each from ticket sales.

The other big stakeholder is Disney, which has paid Rs 3,270 crore for the digital and broadcasting rights. If the matches are canceled, it would lose over Rs 3,000 crore it is expecting to earn from sponsors and advertisers, with many deals tied up. The BCCI will have to renegotiate its five-year contract for the rights and extend it.

However, in case the matches are held closed doors, it could be a beneficiary because 1 percent of the fans who see the matches in stadia will move to TV or Hotstar. It is expected that 600 million people will watch TV and OTT this year.

The eight franchises together could, however, lose ticket income of Rs 80-100 crore. And they could also see some sponsor advertisers walking out in the absence of the opportunity of brand building associated with fans coming to the stadium. Also, revenues from licensing and merchandising could be affected. For some franchisees like KKR, they could be as much as their 40 percent share of the central revenues of the BCCI. Franchisees can make Rs 30-100 crore from team sponsors. But for the players up to Rs 700 crore of fees are at stake. As an IPL franchisee points out, on average franchisees spend about 75 percent of their team auction purse is getting 25 percent of the star players. But even for the 150 others, who make an average Rs 1 crore, it is big money.

At the end of the day, the Government of Sports Ministry is always ready to back the tournament if it got canceled may be subsidies will be given to the regulatory board to overcome the losses.